Building the Business Case for Value-Based Care
Harold D. Miller, president and CEO of the Center for Healthcare Quality and Payment Reform, discusses a fundamental barrier to shifting payment models in healthcare: Some providers mistakenly think all they have to do is tweak existing fee-for-service billing structures without understanding what drives costs in the underlying payment system.
Harold D. Miller, President and CEO
Center for Healthcare Quality
and Payment Reform
The shift away from volume-based, fee-for-service billing towards value-based reimbursements is gaining momentum and will be largely in place over the next few years. And yet a surprising number of healthcare providers really don't grasp the details of how value-based reimbursements work.
Harold D. Miller, president and CEO of the non-profit Center for Healthcare Quality and Payment Reform, says many providers mistakenly believe that all they have to do is tweak existing fee-for-service billing structures without identifying potential savings or understanding what drives costs in the underlying payment system.
Miller, the author of a Robert Wood Johnson Foundation-funded report called Making the Business Care for Payment and Delivery Reform, spoke with me this week about what providers must do to build an effective business case for value-based care. The following is an edited transcript.
HLM: Where are we on the fee-for-service/value-based care timeline?
Miller: It could be the dominant model within the next five to 10 years, but it is a matter of how quickly physicians and in particular physicians in hospitals meet with the purchasers of care— the employers— to work that out. It's about how soon both side come together and create the win, win, win that is good for patients, providers, and purchasers.
HLM: What are the stumbling blocks on the road to value-based care?
Miller: Most health plans and Medicare are trying to change the way care is delivered and reduce costs by piling on pay for performance and shared savings on top of fee-for-service. The problem is that if you don't change the underlying payment system, you don't change the incentives and the barriers that it creates.
For example, one of the best ways to keep people with chronic disease healthier and out of the hospital is for a physician practice to hire a nurse to educate and encourage patients to call when they have a problem. The problem is that doctors don't get paid for nurses and they don't get paid for answering phone calls. So practices are forced to lose money under fee-for-service to deliver better care, even though it would actually save money by keeping the patients out of the hospital.